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CIRCULAR No.1/1998/TM/XNK OF FEBRUARY 14, 1998 THE IMPLEMENTATION OF PRIME MINISTER'S DECISION No.11/1998/QD-TTg OF JANUARY 23, 1998 ON THE 1998 EXPORT AND IMPORT MANAGEMENT MECHANISM AND DECISION No.12/1998/QD-TTg OF JANUARY 23, 1998 ON THE 1998 RICE EXPORT AND FERTILIZER IMPORT MANAGEMENT

On January 23, 1998 the Prime Minister issued Decision No.11/1998/QD-TTg on the 1998 export and import management mechanism and Decision No.12/1998/QD-TTg on the 1998 rice export and fertilizer import management;

Pursuant to the provisions of these Decisions and the results of the export and import management activities in 1997;

The Ministry of Trade hereby guides the implementation of these Decisions as follows:

I. ON THE LISTS OF EXPORT AND IMPORT GOODS

The list of goods banned from export or import, the list of goods managed by quotas, the list of export and import goods subject to specialized management and the list of export and import goods to be balanced against the domestic production and demand shall comply with Appendices 1, 2, 3 and 4 attached to Decision No.11/1998/QD-TTg of January 23, 1998 of the Prime Minister.

II. ON THE GOODS EXPORT AND IMPORT MANAGEMENT

Regarding the 1998 goods export and import management prescribed in the Prime Minister's Decisions No.11/1998/QD-TTg and No.12/1998/QD-TTg of January 23, 1998, the Ministry of Trade hereby provides more concrete guidance for implementation as follows:

1. On the rice export:

1.1- Regarding the quota of 4,000,000 tons: Based on Decision No.12/1998/QD-TTg of January 23, 1998 of the Prime Minister, the Ministry of Trade issued on January 26, 1998 Decision No.0089-TM/XNK on the allocation of 90% of the 1998 rice export quota (3,600 thousand tons), then sent it to the provinces, cities and centrally-run enterprises (Appendix 1 enclosed herewith). If by September 1998, the rice production goes well, the remaining quota of 400,000 tons shall be allocated by the Government.

The provincial/municipal People's Committees shall, upon receiving the Ministry of Trade's decision, have to immediately allocate quotas to enterprises for fulfillment and notify the Ministry of Trade and the concerned ministries as well as branches thereof for the coordinated management. Subjects entitled to be given quotas shall be enterprises engaged in direct rice export in the localities, including members of the Southern Food Corporation; State enterprises having goods sources and markets for entrusted export and foreign-invested enterprises in provinces and cities;

In cases where State enterprises (outside the list of designated enterprises) with licenses for food or farm produce export and/or import find new markets and sign contracts with lucrative commercial terms and prices, the agencies directly managing these enterprises (ministries, branches and provinces) shall propose the Ministry of Trade to consider and allow such enterprises to perform contracts on the case by case basis.

1.2. On the export rice produced in the North and Central Vietnam: The export of rice produced in the North and Central Vietnam shall be further encouraged in 1998. Enterprises of all economic sectors which have licenses for the export and/or import of food, agricultural, forest and aquatic products and have found customers and markets shall be permitted to directly export (rice). During the process of transaction for the signing of export contracts, the enterprises should notify the Ministry of Trade of their estimated export volume, the delivery time limit, the types of rice, the prices, the loading port and the mode of payment so that the latter can provide guidance for the implementation. The customs office shall carry out the export procedures for the enterprises on the basis of written consents from the Ministry of Trade.

1.3. On the designated export enterprises: In addition to the enterprises already engaged in direct rice export in 1997 and those designated by the Prime Minister in Decision No.12/1998/QD-TTg (the Saigon General Trade Corporation, the Red Flag Agricultural Farm of Can Tho province, the Central Agricultural Supplies Corporation and the Grain Export and Import Company); at the conference on rice export and fertilizer import held in Ho Chi Minh City on February 5, 1998, the Prime Minister decided to add two more designated enterprises: one of An Giang province and one of Ho Chi Minh City.

For non-State enterprises which are rice-producing cooperatives and rice-processing enterprises in the Mekong River delta provinces, the provincial People's Committees are requested to recommend them, based on the following criteria:

- Having food business registration certificates and having been engaged in food business activities for two years or more;

- Being capable of mobilizing capital for the export of at least 5,000 tons of rice/shipment;

- Having healthy financial status;

- Having establishments processing rice of export quality.

The Ministry of Trade shall coordinate with the Ministry of Agriculture and Rural Development and the Food Exporters' and Importers' Association in considering and selecting five enterprises for experimental direct rice export.

1.4. Regarding the export market: Regarding markets (Iran, Iraq, the Philippines, Malaysia, Indonesia), previously assigned to a number of enterprises; if now, except for contracts performed under the Government's order, other designated enterprises sign contracts with lucrative commercial terms and prices, they shall be entitled to export rice directly or through a third party to these markets.

1.5. Regarding the export procedures: The customs office shall base itself on the notice of the enterprises' names, their allocated quotas, export contracts and L/C (except for cases of goods exchange or payment by TTR) to carry out rice export procedures for enterprises, without requiring any other documents.

2. On the fertilizer import:

Pursuant to Decision No.12/1998/QD-TTg of January 23, 1998 of the Prime Minister, the Ministry of Trade issued on January 26, 1998 Decision No.0089/TM/XNK on the allocation of the 1998 fertilizer import quotas and sent it to the provincial/municipal People's Committees and the centrally-run enterprises.

2.1. Fertilizer importing enterprises: The list in Appendix 2 attached to this Circular includes 35 designated enterprises:

If there is a need to change designated import enterprises, the concerned provincial People's Committees shall notify in writing the Ministry of Trade, the Bank, the Customs Office, the Ministry of Finance and the Ministry of Planning and Investment thereof for coordinated management.

2.2. The provincial/municipal People's Committees are requested to immediately allocate quotas to the enterprises (as specified in Appendix 2 attached to this Circular), so that the latter can proceed with the import of urea, SA, DAP, NPK and KALI fertilizers according to quotas mentioned in Decision No.0089-TM/XNK of January 26, 1998 at the time suitable to the Summer-Autumn crop, Autumn crop and Winter-Spring crops in northern, central and southern Vietnam, then notify the Ministry of Trade and the concerned ministries and branches for coordinated management.

The deadlines for imported fertilizers to arrive at the Vietnamese border-gates:

- For the Summer-Autumn crop: by June 30, 1998 at the latest;

- For the Autumn crop: by September 30, 1998 at the latest;

- For the Winter-Spring crop: by March 31, 1999 at the latest.

Within 45 days before the above-said deadlines, if any enterprise is still unable to fulfil the fertilizer import quota allocated to it, it shall have to immediately report to the provincial/municipal People's Committees or the Ministry of Trade and the Ministry of Agriculture and Rural Development for a timely allocation of such quota to other enterprise(s).

2.3. The enterprises allocated with import quotas must import fertilizer in full assigned volumes, through prescribed border-gates and at the prescribed time. In case of a need for any adjustments, there must be approval from the Ministry of Trade.

2.4. Non-State enterprises shall be considered and permitted to participate in the import of fertilizers if they fully meet the following conditions:

- Having export and import business licenses that cover the import of fertilizers and supplies in service of agricultural production.

- Having fertilizer supply networks established in accordance with law.

- Having healthy financial status; being capable of mobilizing capital and making payment for the import of at least 50,000 tons of fertilizer per year.

Any enterprise meeting the above-mentioned conditions shall submit its dossier to the Ministry of Trade, including:

- The written request of the enterprise.

- The report on 1997 final account settlement certified by an independent professional auditing organization in strict accordance with the State's current regulations on independent audit.

- The report on its domestic fertilizer supply system (with certification of its superior management agency).

- The export and import business licenses (notarized copy).

2.5. In the first week of every month, the enterprises shall have to send their reports on the previous month's import activities to the Ministry of Trade and the Ministry of Agriculture and Rural Development.

3. For the import of steel, cement of various kinds, paper, glass, refined sugar, raw material crude sugar by domestic enterprises, the Ministry of Trade, the Ministry of Planning and Investment, the Ministry of Agriculture and Rural Development, the Ministry of Industry and the Ministry of Construction have reached the following agreement:

3.1. For cement:

a/ The 1998 black cement import demand is estimated at 200,000 tons.

To assign the Sao Mai joint venture company to import 50,000 tons of unpacked cement for operation of Cat Lai station.

The remaining 150,000 tons shall be imported only when there appear new demands on the basis of the proposal of the Ministry of Construction and the joint management by the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Construction.

b/ Cement of other kinds shall be imported according to production and business demands by the enterprises in line with their export-import licenses; the import procedures shall be carried out at the customs offices.

3.2. For glass:

a/ The 1998 glass import demand: 2.5 million m2 of white plain construction glass of 2-7 mm thick, the Ministry of Trade allocates the import quotas as follows:

+ The enterprises under the Ministry of Construction shall import 1.5 million m2.

+ The enterprises having licenses for the export and import of goods of appropriate lines and under the management of localities and other ministries and branches shall import 1 million m2.

b/ Glass of other kinds shall be imported according to production and business demands by the enterprises having licenses for the export and/or import of goods of appropriate lines; the import procedures shall be carried out at the customs office.

3.3. For paper:

Enterprises having licenses for the export and/or import of goods of appropriate lines shall be entitled to import paper of various kinds according to their production and business demand; the import procedures shall be carried out at the customs office. Particularly, paper of the following kinds shall not be imported in the immediate future:

- Newsprint;

- Writing paper and normal printing paper (not yet surface-processed), including paper of kinds with such trade names as offset, woodfree, photocopy and other trade names, weighing from 50 g/m2 to 80 g/m2.

- Packing paper, including board and flat carboard with the following major technical specifications:

+ A maximum tensile strength of 3 kgf/cm2;

+ A maximum press resistance of 14 kgf.

3.4. For sugar:

- The 1998 sugar import demand is estimated at around 80,000 tons of sugar of various kinds, in which:

+ Crude sugar to be used as raw materials for sugar refineries: in the immediate future, to import some 60,000 tons, the Ministry of Agriculture and Rural Development shall designate its attached enterprises to import such volume not later than August 30, 1998.

+ The Ministry of Trade shall manage the import of 20,000 tons of RE sugar when the market demands after consulting the Ministry of Planning and Investment and the Ministry of Agriculture and Rural Development.

3.5. For steel:

a/ Enterprises having licenses for the export and/or import of goods of appropriate lines shall be entitled to import steel according to their production and business demand. The import procedures shall be carried out at the customs offices.

Particularly, steel of categories specified in Appendix 5 attached to this Circular shall not be imported in the immediate future.

b/ The import of steel waste and scraps and steel from dismantled old vessels must be approved by the Ministry of Industry.

4. THE IMPORT OF AUTOMOBILES AND MOTORCYCLES OF VARIOUS KINDS

In addition to goods items banned from import as specified in Point 9, Section II of Appendix 1 attached to Decision No.11/1998/QD-TTg of January 23, 1998 of the Prime Minister, pending consents from the concerned branches, the following items shall not be imported in the immediate future:

- Tourist cars of 12 seats or less, motorized two-wheelers and three-wheelers (in complete units or SKD form).

- Used engines of automobiles, motorcycles and motor tricycles.

- Motorcycle frames (excluding frames imported in complete units in CKD or IKD forms).

- Dashboards, chassis and chassis mounted with engines (new ones) of automobiles of the kinds subject to special consumption tax (excluding those imported in complete units in CKD or IKD forms).

- Used ambulance cars.

- Cargo-cum-passenger automobiles.

The import of other types shall be managed as follows:

a/ For automobiles in complete units of various kinds: passenger cars, trucks and other new or used left-hand drive automobiles. The import of used automobiles must ensure technical criteria under the current regulations of the Ministry of Science, Technology and Environment. New ambulance cars shall be imported only for transport of patients of hospitals and healthcare establishments, they shall not be used for other purposes. The enterprises having licenses for the import and/or export of goods of appropriate lines shall be entitled to import automobiles of the above-mentioned kinds in complete units according to their production and business demand. The import procedures shall be carried out at the border-gate custom offices.

b/ Foreign-invested enterprises shall base themselves on their own plans for the manufacture and assembly of automobiles of various kinds and motorbikes to submit their plans for the whole year's import of IKD components to the Ministry of Trade before March 31, 1998 for consideration and allocation of import quotas.

c. Domestic enterprises which have invested in the manufacture and assembly of motorbikes with IKD components, have obtained consents from the manufacturers (their foreign partners) and the Ministry of Science, Technology and Environment (or the agency authorized by that Ministry) and have been granted licenses to import IKD components in 1997 by the Ministry of Trade shall submit their plans for import of components for the whole year to the Ministry of Trade for approval.

- For other domestic enterprises having projects for investment in the manufacture and assembly of motorbikes in the IKD form, the Ministry of Trade shall, after consulting the concerned ministries and branches, issue a circular detailing the implementation.

5. The import of liquor:

Pending a separate guiding circular of the Ministry of Trade, in the immediate future, the import of liquor shall be subject to the 1997 management mechanism.

6. The export of coffee and rubber: shall, in the immediate future, be conducted in accordance with the 1997 management mechanism.

7. The import of used equipment and machinery: Enterprises having licenses to export and/or import of goods of appropriate lines shall be entitled to import used equipment and machinery in accordance with the regulations of the Ministry of Science, Technology and Environment and the specialized management agency (if any); the import procedures shall be completed at the customs offices without having to obtain permission from the Ministry of Trade. Particularly, the import of equipment in complete sets and separate equipment with State budget capital shall comply with Decision No.91-TTg of the Prime Minister.

III. IMPLEMENTATION PROVISIONS

The Ministry of Trade urges the ministries, the ministerial-level agencies, the agencies attached to the Government, the People's Committees of the provinces and cities directly under the Central Government and the central committees of the mass organizations to announce this Circular to enterprises under their respective management for implementation, and at the same time report to the Ministry of Trade on matters arising in the course of implementation for timely and appropriate adjustments.

This Circular takes effect from the date of its signing to March 31, 1999.

For the Minister of Trade

Vice Minister

NGUYEN XUAN QUANG

Appendix 1

THE 1998 RICE EXPORT QUOTAS

(Attached to Circular No.01/1998/TM/XNK of February 14, 1998 of the Ministry of Trade)

Ordinal Areas Allocated quotas

number

A LOCALITIES 2,520

1 An Giang province 450

2 Can Tho province 330

3 Dong Thap province 330

4 Long An province 210

5 Vinh Long province 250

6 Kien Giang province 130

7 Tien Giang province 270

8 Tra Vinh province 150

9 Soc Trang province 120

10 Bac Lieu province 70

11 Ca Mau province 30

12 Ben Tre province 20

13 Thai Binh province 40

14 Ho Chi Minh City 120

B CENTRALLY-RUN ENTERPRISES 1,080

15 The Southern Food Corporation 620

16 The Northern Food Corporation 300

17 Export and Import Company - Gedosico (under the Ministry of Trade) 100

18 The Central Agricultural Supplies Corporation 30

19 The Grain Export and Import Company (Grainco) 30

Total 3,600

Appendix 2

THE LIST OF DESIGNATED ENTERPRISES FOR 1998 FERTILIZER IMPORT

(Attached to Circular No.01/1998/TM/XNK of February 14, 1998 of the Ministry of Trade)

1. Long An Ladfeco Company Long An province

2. Long An Food Company -

3. Dong Thap Agricultural Supplies and Food Company Dong Thap province

4. General Export-Import and Trade Company -

5. An Giang Food Company An Giang province

6. Tien Giang Food Company Tien Giang province

7. Vinh Long Food and Foodstuff Company Vinh Long province

8. Vinh Long Export-Import Company -

9. Tra Vinh Export-Import and Food Company Tra Vinh province

10. Soc Trang Food and Foodstuff Company Soc Trang province

11. Can Tho Food Company Can Tho province

12. Song Hau Agricultural Farm -

13. Minh Hai Food Company Bac Lieu province

14. Ca Mau Agricultural Produce and Foodstuff

Export-Import Company Ca Mau province

15. Dong Nai Agricultural Supplies Company Dong Nai province

16. Hai Phong Hachimex Company Hai Phong city

17. Hanoi Ha Anh General Supplies Company Hanoi City

18. Nghe An Agricultural Supplies Company Nghe An province

19. Thanh Hoa Export-Import Company Thanh Hoa province

20. Quang Nam-Da Nang Agricultural Quang Nam province

21. Daklak Export and Import Investment Company Daklak province

22. Phu Yen General Trade Company Phu Yen province

23. Binh Dinh Agricultural Supplies Company Binh Dinh province

24. Grainco Company The Ministry of Agriculture

25. The Southern Food Corporation and Rural Development

26. The Northern Food Corporation -

27. The Vietnam Coffee Corporation -

28. The Vietnam Rubber Corporation -

29. Vigecam Corporation -

30. General Export and Import Company No.3 The Ministry of Trade

31. Vietnam Chemicals Corporation The Ministry of Industry

32. Minerals Export and Import Company The Ministry of Trade *

33. One company of Nam Dinh province Nam Dinh province *

34. One company of Gia Lai province Gia Lai province *

35. Sai Gon Agriculture Corporation Ho Chi Minh City

-----------------------------------

* Added designated enterprises in 1998 under Decision No.12/1998/QD-TTg

Appendix 5

THE LIST OF STEEL CATEGORIES BANNED FROM IMPORT IN 1998

(Attached to Circular No.01/1998/TM/XNK of February 14, 1998 of the Ministry of Trade)

1. Construction plain steel rods of from 6 mm to 40 mm in diameter

2. Construction barbed steel rods (nodded, stripped, veined, twisted) of from 10 mm to 40 mm in diameter

3. Regular angle steel (V-shape) and irregular angle steel (L-shape), from 20 mm to 100 mm

4. Steel of various kinds of C (U)- and I (H)-shape, under 120 mm

5. Welded steel pipes and tubes: black or zinc-plated, of from 14 mm to 115 mm in diameter

6. Flat zinc-plated steel sheets, of 0.25 mm to 0.55 mm thick and up to 3,500 mm long, corrugated zinc-plated steel sheets and corrugated steel sheets plated with non-ferrous metals

7. Steel wire of various kinds: black and soft, black and hard, zinc-plated wire, barbed wire and B40 lattice.-